Legal changes affecting construction businesses from 1 October 2015

1 October 2015 ushers in a number of legal changes which affect construction businesses operating in the UK. We have provided brief highlights of some of the changes below. If you need further information, please contact us using the details on the right.

Introduction

This article considers section 238 of the Insolvency Act 1986 ('IA 1986') within the context of what the courts consider to be a ‘transaction’ when applying for a declaration to do with antecedent transactions. Whilst this article is limited to the consideration of section 238, similar factors apply to applications made further to sections 339 and 423 IA 1986.

Key Point

An English Court holds that a rate saving scheme involving liquidations of tenant companies is an abuse of the English insolvency legislation.

The Facts

Key point

The Court is prepared to look at the overall nature of a directors conduct and dissect a complex series of transactions before concluding what (if any) insolvency failings have been committed by a director.

The Facts

Key Point

Judgement provides detailed guidance on administrators making distributions in relation to EU incorporated companies.

The Facts

We all know that statutory demand can be issued for undisputed debts in excess of £750, and if not satisfied for 21 days, the stat demand is prima facie evidence of insolvency. What happens where there are multiple dents of less than £750 each however? Howell v Lerwick Commercial Mortgage Corporation Ltd [2015] EWHC 1177 (Ch) provides an insight.

The background

Introduction

In The STX Mumbai [2015] SGCA 35, a five-member Court of Appeal sat to hear an admiralty case for the first time. The case involved a novel issue of an anticipatory breach of an executed contract. The significance of this case is two-fold: under what circumstances may legal action be brought before the credit period expires and also, whether insolvency of a parent company has an impact on its subsidiary, possibly disregarding the corporate veils.

The English High Court has again considered whether by itself the choice of English law and court jurisdiction in legal documentation establishes a “sufficient connection” with England to enable a foreign company to avail itself of an English scheme of arrangement.

Background

In Mark Howell v Lerwick Commercial Mortgage Corporation Limited, the High Court has held that statutory demands will not necessarily be set aside if the undisputed debt is less than £750, where there other debts which would take the cumulative total over this limit.

Facts

Mr Howell obtained finance from Lerwick in 2010 to develop a property and paid £2,750 to Lerwick to obtain a valuation. Mr Howell claimed that the valuation provided was sub-standard, and as a result there were delays in the development and its subsequent sale.

A number of headlines following a recent high-profile professional negligence case suggest that there is no duty on a purchaser’s conveyancer to check a seller’s solvency. It is, of course, part of the normal pre-contract searches and enquiries to check on the solvency of the seller, and in the majority of cases, the property solicitor will become aware of the seller’s bankruptcy, as a notice or restriction on the title will show up on the official search of the registered title.  

Solvent